9 January 2013
Pactolus Hungarian Property plc
(the "Company" or the "Group")
Ahead of the Company's EGM to be held at 11 a.m. today, the Company provides
the following trading update:
Proceeds from previously announced property sales (including those announced in
the Circular of 12 December 2012) have all been received.
The Group reached a position of zero net bank debt on 20 December 2012. The new
two year EUR 1,500,000 loan facility with Investec Bank (UK) Limited, as
announced in the Circular, has now been executed and has been drawn down in
full. The Group also had an Other Creditors balance of approximately EUR
615,000 at the year end (of which EUR 463,000 is due to the Asset Manager).
The lettings market in Budapest has deteriorated further. As at the year end,
the Group owned 28 properties of which 11 are currently unlet. The Asset
Manager is working hard to let or sell the empty properties but there is no
guarantee that market conditions will improve.
Throughout the year, the Group has been selling its properties at an average
discount of 7 per cent to their 31 December 2011 valuations. In light of this
and the continuing weak conditions in the market, the Group has decided to make
a number of write downs to asset values totalling EUR 1,173,000. These include
a write down of the value of all furniture and fittings, a provision for all
future disposals of Group properties, related agents' commissions and legal
costs, and a write down to the previous carrying value of all properties of 7
The resultant unaudited net assets are estimated to be EUR 7,323,000 (31
December 2011; EUR 9,335,000) with the net asset value per share estimated to
be approximately 38 pence per share at 31 December 2012 (31 December 2011;
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